All Forum Posts by: Matthew Lockwood

Cant believe its been 8 years since I originally posted about looking to meet up with other KCmetro people to talk real estate investing.  Trying again.  Anyone interested in getting together for a beer to discuss rentals in the KC area? Let me know!

Well- it took a while but I managed to find a bank that would do a rental property HELOC.

I started calling local banks- finally landed on Bank of Blue Valley. They were willing to extend a HELOC. Please email me directly if you're interested in the details here in KC.

@Young Park, thank you for the information. Unfortunately I tried PenFed and they only allow a total of 3 properties, and I have four. So the search continues.

matt

Hi Chris,

did you use CACU for a HELOC on an existing investment property?

Looking for a specific bank / credit union that will provide a HELOC on an investment property in the KCMO area.

Not having any luck finding anyone that will provide this product.

Specifically, I have three properties, one with no lien on it, that I want to get a HELOC for. Excellent credit and very low DTI.

Not looking for Hard money loans or cash out refi’s.

Thx,

Matt

Thanks Jaysen,

1) Im with you about never having to pay interest, however, I have to get there.

2) Thats good info.  Looks like I may have to wait til after I file taxes to see if it makes sense to itemize and thus be concerned about the deduction.

THanks,

Matt

Ive been contemplating the "Replace your Mortgage with a HELOC" scheme to pay it off early.

Heres my very specific question:

If I do nothing with the HELOC , but simply replace my mortgage with it in the first lien position, and pay it down quckly (the reason for the strategy), can I deduct the interest?

I know that you can no longer deduct interest on a HELOC for "lifestyle" uses (ie paying off a credit card or taking a vacation) but you can deduct the interest if youre using the HELOC to, say, add an addition to your house, certain restrictions apply of course.

I dont want to replace my mortgage with a HELOC and subsequently lose the mortgage interest deduction as a tax perk. Can I write off the HELOC interest if I dont use it at all?

My example:

Home Value 255K, I owe 150K. Would replace the mortgage with a HELOC worth about 200K (80%LTV). I would owe 150K on the HELOC. Is the interest on that 150K deductible?

Thanks,

Matt

I'd be happy to be wrong, but I do believe the HELOC would not be tax deductible. Since you are not using the funds for improvement on the home the funds were secured with (which would have to be your primary home or secondary), it wouldn't be tax deductible.

Ive attached a blurb from the IRS website.  I'm happy to be shown that I'm wrong.

I am considering a HELOC in the first position on my primary residence but I am seeing that the only way it will be deductible (the interest) would be for improvements on the primary house itself.

"Under the new law, for example, interest on a home equity loan used to build an addition to an existing home is typically deductible, while interest on the same loan used to pay personal living expenses, such as credit card debts, is not. As under prior law, the loan must be secured by the taxpayer’s main home or second home (known as a qualified residence), not exceed the cost of the home and meet other requirements.

The Tax Cuts and Jobs Act of 2017, enacted Dec. 22, suspends from 2018 until 2026 the deduction for interest paid on home equity loans and lines of credit, unless they are used to buy, build or substantially improve the taxpayer’s home that secures the loan."

@Adam M, I think this is the mailing list...

who's up for a Monday night meeting soon?